Dish Network 2004 Annual Report Download - page 71

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As part of our evaluation of our disclosure controls and procedures and internal control over financial reporting, we
identified certain deficiencies in the Company's internal control over financial reporting that constitute a “significant
deficiency” as defined by the Public Company Accounting Oversight Board’s Auditing Standard No. 2. This
significant deficiency resulted in part from the failure to maintain accurate books and records identified by the
Review described under “Item 1 Description of Business – Recent Developments -- Internal Review and Filing of
Purported Securities Class Action”. That Review reported one instance in which one of our executive officers in
charge of certain business functions directed the preparation in prior years of inaccurate documentation that was
used to determine payments made to a vendor. We have also identified several other significant deficiencies, none
of which individually or in the aggregate constituted a “material weakness” in our internal control over financial
reporting as of December 31, 2004.
Management’s Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting.
Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles.
Our internal control over financial reporting includes those policies and procedures that:
(i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect our
transactions and dispositions of our assets;
(ii) provide reasonable assurance that our transactions are recorded as necessary to permit preparation of our
financial statements in accordance with generally accepted accounting principles, and that our receipts
and expenditures are being made only in accordance with authorizations of our management and our
directors; and
(iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use,
or disposition of our assets that could have a material effect on our financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance with policies or procedures may
deteriorate.
Our management conducted an evaluation of the effectiveness of our internal control over financial reporting based
on the framework in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations
of the Treadway Commission. Based on this evaluation, our management concluded that our internal control over
financial reporting was effective as of December 31, 2004.
The scope of management’s assessment of the effectiveness of internal control over financial reporting excludes the
businesses and related assets of Gemstar’s Superstar/Netlink Group L.L.C. (“SNG”), UVTV distribution, and
SpaceCom, which we acquired in a purchase business combination during 2004. Our consolidated total revenues for
the year ended December 31, 2004 were approximately $7.151 billion, of which the revenues of SNG, UVTV
distribution and SpaceCom represented $59.0 million, or less than 1%. Our consolidated total assets as of December
31, 2004 were $6.029 billion, of which the assets of SNG, UVTV distribution and SpaceCom represented $12.9
million, or less than 1%.
Our management’s assessment of the effectiveness of our internal control over financial reporting as of December
31, 2004 has been audited by KPMG LLP, an independent registered public accounting firm, as stated in their
attestation report which is included herein.